On Monday, the Commerce Department accused the supplier, Fujian Jinhua Integrated Circuit Co., of sourcing its chip technology from the United States and positioning itself to push out American suppliers of USA military systems.
Fujian Jinhua had filed a countersuit against Micron in Chinese court in January.
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Earlier this year, the Trump administration put an export ban on ZTE.. If the US chipmakers go out of business, the military would lose a supplier for an item that must come from the United States. It is eager to prevent China's ascendance as an economic and technological powerhouse and has begun aggressively scrutinizing foreign deals to prevent Beijing from gaining access to valuable American intellectual property.
Now, the Trump administration is taking action "in light of the likely USA -origin technology" that "threatens the long term economic viability of US suppliers of these essential components of US military systems".
Jinhua has been on the Trump administration's radar for several months.
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But the restriction of exports to Fujian Jinhua actually relates to a much older problem: Accusations of Chinese businesses stealing American trade secrets to shift the balance sheets (and balance of power) in their favor. The company has invested $5.65 billion to build a factory in China devoted to producing memory chips.
The world's top two economies are already waging a major tariff war over their trade disputes, with USA duties in place on $250 billion worth of Chinese goods and Chinese duties on $110 billion of US goods. China has responded with its own tariffs, and the two countries have exchanged increasingly heated words in recent weeks.
Rising fears: Besides seeing microchips as a powerful weapon in the trade war, the Trump administration fears that China's growing expertise in chipmaking could eventually challenge one of America's biggest export industries. Trump and Xi are expected to meet in Argentina next month at the Group of 20 summit, where they plan to discuss trade, North Korea and other issues.
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